The House of Representatives is expected to pass a bill Tuesday evening to loosen restrictions on private flood insurance, which is geared to ease the burden on a debt-ridden federal program.
The Flood Insurance Market Parity and Modernization Act, introduced by Reps. Dennis Ross (R-Fla.) and Patrick Murphy (D-Fla.) clarifies that privately issued flood insurance policies meet a federal requirement for homes in flood-prone areas. It was passed unanimously out of the House Financial Services Committee in March.
The legislation was introduced in June 2015, but deadly floods devastated the Midwest and Southwest during the December holidays pushed the committee to move quickly.
The bill is intended to relieve pressure on the National Flood Insurance Program (NFIP), which issues most flood insurance policies in the United States. Established in 1968, the program remained solvent until Hurricane Katrina in 2005 and superstorm Sandy in 2012 sunk NFIP in $23 billion in debt.
Lawmakers argued that easing private flood insurance into the market would help stabilize NFIP, lower prices and spur innovation. The combination would give more Americans access to flood insurance plans and make those policies tailored to their specific needs.
Committee Republicans universally backed the bill, but Democrats were merely receptive until the addition of language ramping up oversight of private insurance policies.
The bill also received broad support from homebuilders, insurance providers and fiscal hawks, who said it would reduce spending and taxpayer risk.
The House is also expected to pass two more bills from the Financial Services Committee: the Investor Clarity and Bank Parity Act, which allows a hedge fund or private equity firm to share a name with a banking entity that advises it, and the Fair Access to Investment Research Act, which would clear research reports on exchange-traded funds from certain federal reporting regulations.